If you are reading this article, you already know about the lawsuit between SCO and IBM, and between Red Hat and SCO.

SCO's basic argument is that IBM has swindled it out of lots of valuable source code and contributed it to Linux, which it had no right to do. SCO's complaint relies heavily on a 1985 licence agreement between AT&T and IBM. While SCO's complaint quotes extensively from that agreement, it makes scant mention of the "side letter" to that agreement, which SCO filed as Exhibit C to its complaint.

That side letter expressly permits IBM to create new products using "ideas, concepts, know-how or techniques" found in the Unix code, as long as the programmers creating the new products do not (1) copy code from Unix or (2) refer to the Unix code or manuals in creating those new products. In addition, on page two of the side letter, AT&T agreed that "modifications and derivative works prepared by you [IBM] are owned by you." Thus, unless IBM actually copied Unix code into its Linux contributions rather than re-coding the ideas it found there, its contributions to Linux were probably proper.

Even if IBM did copy code from Unix, SCO will have to establish that it (or its predecessor owners of Unix) wrote the code, rather than taking it from some other source. Lest anyone think that Unix is an OS with a simple history, I'd suggest you take a look at SCO's version of the story.

IBM's counterclaims add more complexity to the case by alleging that SCO infringes four of its patents. If this case were to be litigated to its conclusion, it would take many, many years and the costs -- to SCO, its attorneys or both -- could exceed SCO's current cash on hand. This does not even take into account the Red Hat lawsuit and others that may follow.

If you have deployed Linux, what are you supposed to do while these companies wrangle with each other? After all, the lawsuit could drag on until your children are old, and you have decisions to make now. Obviously, you should talk this over with your own attorneys. But when you do, consider the following:

1. We've been here before. AT&T (through a subsidiary) sued an early distributor of a Unix variant, alleging theft of trade secrets. In Unix Systems Laboratories, Inc. v. Berkeley Software Design, Inc. 29 U.S.P.Q.2d 1561 (D.N.J. 1993), AT&T sought a preliminary injunction against distribution of an open-source version of Unix (BSD) created at the University of California. The District Court denied the injunction, expressing considerable doubt that AT&T had demonstrated that there were any trade secrets left in Unix. And that was ten years ago.

2. SCO has a duty to mitigate damages. Any plaintiff complaining that it is being injured by wrongful conduct has a duty to mitigate its damages. In order for SCO to assert claims against Linux users, it has to take reasonable steps to lessen the harm that it is suffering. This means giving Linux users the opportunity to remove the infringing code from Linux. SCO's refusal to identify the Linux code in question is hard to defend. SCO says that it can't do so, because it would be akin to showing a thief his fingerprints so that he can clean them off. But that makes no sense. The "fingerprints" are available in many forms, and can be traced electronically. Keeping the Linux community guessing about the code seems more tailored to running up the damages than preserving evidence.

3. SCO Is a party to the GPL. This fact by itself may not be fatal to SCO's case because SCO claims that its distribution of its "trade secrets" under the GPL was inadvertent. SCO tried to set things straight on 14 May, 2003, when it announced that it had ceased selling Linux in order to terminate its own distribution of the allegedly infringing code. According to IBM's response and counterclaims, however, SCO continued to distribute Linux through its Web site after its announced suspension of Linux distribution. SCO says that the code was made available only to support existing customers, and that no complete copy of Linux was available in a single download. Nonetheless, if infringing code was made available under the GPL after the 14 May announcement, SCO could have a lot of explaining to do, both about its protection of its trade secrets, and about why the GPL should not apply to that code.

4. SCO may have set a ceiling on recovery. SCO has already announced a licensing program with specific licence rates. In the worst case, and unless and until SCO makes a much clearer and more public case that its code has been stolen, SCO is not likely to recover from individual users more than it has announced its licence fees to be. Why pay now when you can pay later or quite possibly not at all?

5. SCO has its hand full. SCO has stirred up a hornets' nest in suing IBM. It may well have more lawsuits on its hands as other interested parties get involved, as Red Hat has. It does not have the resources to sue every Linux user simultaneously. And, the user that SCO singles out might be able to have its case consolidated with the SCO v. IBM case, letting IBM do the heavy lifting of proving that its Linux contributions were made properly.

6. Even if Linux contains SCO code, you might not be infringing. If you run devices with Linux pre-installed, your system might not be using copies of the files that SCO says are infringing. Since nobody knows yet what portions of Linux are alleged to be infringing, it is too early to tell. But if the offending code relates to exotic, seldom-used portions of the operating system that never get invoked in your use of the device, then there is no copying, and thus no infringement.

7. This may be a time to take a stand. SCO has not proven its case to anyone, and is already threatening thousands of users and announcing the price of peace at "introductory" rates. According to IBM's counterclaims, "SCO's counsel stated, in an interview with Maureen O'Gara of LinuxGram, that 'it doesn't want IBM to know what (SCO's substantive claims) are.'" This means that SCO is deliberately depriving the Linux community of the opportunity to remove any infringing code from Linux. Is this behavior that you want to encourage or reward? Do you really think that a court will reward it?

Unless and until SCO gives the Linux community the opportunity to correct any real problems that it may have, SCO is in a very difficult position. And if IBM is correct it its characterisation of the facts -- that SCO knows or should know that its claims are bogus -- SCO itself could be in serious jeopardy. Both IBM and Red Hat allege facts that sound of market manipulation by SCO. Perhaps the Securities Exchange Commission or some State attorneys general will develop an interest in this case before it is all over. SCO could find this experience to be very painful. Meanwhile, most Linux users might well take a pass on SCO's proposed licence until the fight with IBM results in a much clearer picture about the pedigree of Linux.

Thomas C. Carey is a partner at Bromberg & Sunstein and chairs the firm's Business Practice Group. He devotes a substantial portion of his time to counselling software and technology companies in their business transactions. Before becoming an attorney, Tom was a computer programmer and a city planner working for the City of New York.

Join Discussion

More from Thomas Carey

Thank You

By registering you become a member of the CBS Interactive family of sites and you have read and agree to the Terms of Use, Privacy Policy and Video Services Policy. You agree to receive updates, alerts and promotions from CBS and that CBS may share information about you with our marketing partners so that they may contact you by email or otherwise about their products or services.
You will also receive a complimentary subscription to the ZDNet's Tech Update Today and ZDNet Announcement newsletters. You may unsubscribe from these newsletters at any time.